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Budget deal isn't in sight

A "fiscal summit" found little common ground on curbing the nation's debt.

WASHINGTON - On this, some of Washington's highest-ranking budget players can agree: A "grand bargain" this year to close the nation's chronic budget deficits seems like a long shot.

That was the consensus at an annual Washington "fiscal summit" thrown by billionaire deficit hawk Pete Peterson, who's staked $1 billion of his fortune on a foundation aimed at raising public awareness of the dangers of the government's growing debt.

But barely 100 days into President Obama's second term - supposedly a time of peak possibility in a divided capital city - a bipartisan squad of Washington's budget big shots was decidedly downbeat on the chances of following up January's big tax increase on the wealthy with a follow-up deal.

"A 'grand bargain' implies you're going to fix the problem, but when you have the majority party in Washington unwilling to embrace the kinds of reforms that make Medicare solvent or make Social Security solvent . . . I don't see a grand bargain happening," said House Budget Committee Chairman Paul Ryan (R., Wis.), a frequent attendee at Peterson's event.

"The question is," Ryan continued, " 'Can we make divided government work and can we make a down payment on the problem? Can we buy the country time as fiscal space?' That's what we're shooting for - something that's realistic."

The cause for the gridlock is a familiar impasse over tax increases. GOP resolve against tax hikes has only intensified since Obama in January extracted a $600 billion-plus tax hike on the wealthy over 10 years as the price for extending the rest of the Bush-era tax cuts.

Appearing a few minutes later, Ryan's counterpart as top Democrat on the budget panel offered a similarly pessimistic assessment.

"There is no evidence that we are getting closer to an agreement," said Rep. Chris Van Hollen (D., Md.).

President Obama's representative, National Economic Council chairman Gene Sperling, demurred when pressed by moderator Chuck Todd of NBC News about whether he was optimistic of a budget pact.

"Deficit reduction is never easy. It's never fun. It requires hard choices. And when you have divided government, whether it's 1997 or now, it requires compromise," Sperling said. "What you need though is for both sides to be able to feel that they achieved enough of their objectives that the compromise in the areas they don't like is acceptable because the plan as a whole is balanced."